Thursday, June 04, 2009


Circular No. NP088/09 4th June 2009 To: All Branches with South West Trains and Island Line members, Regional Councils and Regional Organisers Dear Colleague, Introduction of PaySave (Salary Sacrifice) – South West Trains & Island Line Management has written to employees advising that an arrangement called PaySave is being introduced with effect from 1st July. PaySave is another name for salary sacrifice. PaySave allows employees and employers to save National Insurance contributions on their pension contributions through reducing the headline salary rate by the amount of their contribution to the pension scheme. Management are proposing that employees contributing to the Railways Pension Scheme (RPS) earning more than £6,750pa will be automatically opted in to the arrangement. Participation in PaySave does not affect other terms and conditions of employment and a number of companies have introduced such arrangements. RMT policy is against salary sacrifice schemes as these effectively reduce the value of National Insurance contributions collected by the Treasury, which are, of course, used to fund the National Health Service and State Pensions. However, where such schemes are introduced we believe that any savings should be paid into the employer’s pension scheme, in this case the RPS, to improve the funding position and reduce contribution levels. RMT is totally against employees being automatically opted-in to such schemes. Management should not automatically assume its employees wish to participate in the scheme. Whilst participation in PaySave will reduce members National Insurance contributions, the amount saved is insignificant when compared to the massive savings to be made by management. That is of course why employees are automatically opted-in and is just another example of companies increasing their profitability from the privatised railway industry. I attach a copy of the South West Trains/Island Line opt-out form for use of members who wish to follow RMT policy and opt out of PaySave. Yours sincerely R. Crow General Secretary

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